NEW YORK—When Donald Trump’s accountants disavowed 10 years’ worth of financial statements from the mogul’s company—saying in essence their client lied—it turned out to be only the tip of the legal iceberg the former GOP White House occupant faces.
The reason? Trump’s accountants were replying to a detailed 113-page record of facts of fraud committed by Trump, his company and his kids, who are company officers, too, from 2010-2020.
The frauds prompted New York Attorney General Letitia “Tish” James to subpoena Trump, his sons and daughter, his company, his personal accountant and his law firm—Morgan, Lewis and Bockius, which is also known for union-busting. Trump, his kids, the company and the law firm all resist the subpoenas.
The documented frauds—everything from lying about assets to tripling the real size of Trump’s New York penthouse—are just one of several big legal problems the one-time White House denizen faces.
Another key probe is an investigation by Georgia officials of Trump’s infamous phone call to GOP Secretary of State Brad Raffensperger after the 2020 election, ordering him to “find” 11,780 pro-Trump votes in the Peach State to give Trump a one-vote victory over Democratic nominee Joe Biden.
In other words, Trump was trying to do what he accused the Democrats of doing: Stealing the election.
And now, news reports reveal, Trump routinely tore up documents he received while inhabiting the Oval Office, and even tried to flush the pieces down White House toilets. His aides, realizing Trump broke federal records laws, taped them back together. But the fact remains Trump broke those laws—laws passed after fears the GOP Nixon administration would, if it got its hands on them, destroy the White House Watergate-related tapes.
If convicted of such felonies, the U.S. Constitution would disqualify Trump from holding office again, assuming he and/or the Republican Party obeys the nation’s basic charter and thus he can’t run in 2024.
But given Trump’s avid encouragement of the Jan. 6, 2021, U.S. Capitol insurrection, and the Republican National Committee’s recent support of the invasion and censure of Reps. Liz Cheney, R-Wyom., and Adam Kinzinger, R-Ill., for upholding the Constitution, that assumption is doubtful.
But even more than political disgrace, Trump faces an additional threat from James’ probe: Jail.
She made it clear that if found guilty of the financial frauds, in papers filed with New York State Supreme Court in Manhattan, he could not only face civil penalties, but a criminal trial and prison time, too.
That’s because, after working through 930,000 documents Trump and his side previously provided—including Trump’s tax returns—James reiterated the state is probing both Trump and his company on criminal charges, as well as civil ones.
“Overheated rhetoric cannot avoid the reality that parallel civil and criminal investigations into the same set of alleged facts is routine and encouraged as a matter of sound and efficient law enforcement policy at the federal and state level,” James replied when Trump and his lawyers tried to toss out the AG’s subpoena demand.
“That is true whether the investigations are being conducted by one agency—for example, a single United States Attorney’s office—or multiple offices or agencies.” James is now working in concert with the Manhattan DA’s office on probing Trump, his company and his taxes.
The evidence James presented is damning enough and James lays it all at Trump’s feet. She bluntly said Trump signed off on everything, a statement consistent with Trump’s own methods and his rhetoric, including his political rhetoric.
It also makes clear why Trump’s accountants have now disavowed their prior findings. The reasons include:
- Trump “misstated objective facts, like the size of Mr. Trump’s Trump Tower penthouse.” He said it was 30,996 square feet. It’s one-third that size.
- Trump “inflated future revenues and expenses” and said outside professionals were involved in valuing Trump’s properties, when they weren’t.
- Trump lied to his lenders—as well as state and local officials–in seeking financing for his purchases.
In one case, involving his Briarcliff, N.J., golf club, “Without the supporting data document, a reader of the financial statement would be unaware the value of Briarcliff increased by over $75 million from 2012 to 2013, and by over $100 million from 2011 to 2013. A reader of the statement would also be unaware this increase in value came in part from adding 40 homes and over $75 million in additional profit to the forecast of a project that was ‘on hold,’” the court papers say.
- Trump and his company “miscategorized assets outside Mr. Trump’s or the Trump Organization’s control as ‘cash,’ thereby overstating his liquidity.” In layman’s terms, Trump was saying he had more cash on hand to pay for his real estate empire’s purchases than he actually did. Those lies came when he sought loans to buy them and policies to insure them.
That’s important, the AG said, because Trump often personally guaranteed he would repay the loans if the company couldn’t.
That promise covered, among other Trump properties, two loans totaling $107 million from Deutsche Bank to buy and build his tower at 401 North Wabash Avenue in Chicago, other Deutsche Bank loans to buy golf courses in Florida and Los Angeles and a $170 million Deutsche Bank loan to lease and renovate the Old Post Office, just blocks from the White House, in D.C., into a luxury hotel.
“In light of the pervasive and repeated nature of the misstatements and omissions, it appears the valuations…were generally inflated as part of a pattern to suggest Mr. Trump’s net worth was higher than it otherwise would have appeared. The knowledge and actions of Mr. Trump’s agents and attorneys can be imputed to Mr. Trump himself,” James’ court filing says.
Not included in the court documents: The hotel’s revenues have tanked. The combination of the coronavirus-caused depression travel and hotels and the toxicity of Trump’s “brand,” led well-heeled clients, except for Trumpites and GOP groups, to shy away. Trump’s company, still headed by Ivanka Trump and Donald Trump Jr., is trying to unload the lease.
The court papers also don’t mention that a check of current valuations in the Cook County Assessor’s office shows 20 luxury apartments at Trump’s tower in Chicago are currently listed for tax purposes at between $204,000 and $298,000 each, with 64 more valued at $71,000-$100,000 each, and only two of those reached six figures. That’s a far cry from the $62 million Deutsche Bank loan to cover the apartment section of the tower.
Yet Trump kept telling the bankers, every year, that his valuations “were true and correct in every material respect,” James’ court papers say. His daughter, Ivanka, representing the company, was involved in bargaining both Deutsche Bank loans, including Trump’s guarantees of his net worth.
“Since 2019, the Office of the Attorney General has taken testimony from Trump Organization employees and others involved in these and other valuations. Those involved have not been able to provide plausible justification for the valuation decisions at issue” or of how they discussed the values with outsiders, including officials.
“But Mr. Trump’s actual knowledge of—and intention to make—the numerous misstatements and omissions made by him or on his behalf are essential components to resolving OAG’s investigation in an appropriate and just manner. Likewise, Donald Trump, Jr. and Ivanka Trump worked as agents of Mr. Trump, acted on their own behalves, and supervised others in connection with the transactions.”
James, in a statement accompanying her request to the court in Manhattan to issue and enforce subpoenas against Trump, said both the ex-Oval Office occupant and his company “used delay tactics and litigation” for more than two years to try to “thwart a legitimate investigation into its financial dealings.”
“Thus far, we have uncovered significant evidence that suggests Donald J. Trump and the Trump Organization falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for economic benefit. The Trumps must comply with our lawful subpoenas for documents and testimony because no one in this country can pick and choose if and how the law applies to them.”
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